Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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These events happen regularly in Ecuador and the reason for the fall in share price has very little to do with this in my opinion. More to do with wider markets and the fact that SOLG were almost invincible over last few weeks while rest of market fell apart. When the likes of Blackrock or Norge Bank take their foot off the metal and hit the breaks, that buy volume or lack of it is soon felt. But both these large entities were strong buyers in the 33p to 35p levels and that's where majority of the big orders get printed. Getting large stock chunks out of pi's hands is not easy but moving the price down 15% has certainly got a few handing them over.
New CFO starts next week. EGM at end of week. News likely in-between and then we start to see the sharp end approaching fast. Ironically, the market position right now is perfect for a BHP bid or Twiggy gina type entity. Pitch an offer in the right area and they might get a bargain as battered investors decide to cash in chips. When all is well and bulls are singing, you really don't want to be a big M&A buyer. You want to be a seller.
"If we want to sell off tenements, then we will need to sell a larger share or maybe 100%.
Therefore we will be attributing a higher value, and as such maybe will be used as part funding of Alpala and Porvenir. Hence this is about part funding and not about selling our flagship projects."
If my understanding of this morning's RNS is correct, none of this is accurate. We can still sell off below 50% of any asset we own, it just means that (if we don't reach the 50% threshold) it has no impact on the directors' LTIP/Bonus.
Separately, whether we sell off 30% or 50% of an asset, I fail to see how a greater number would be "attributing a higher value". The valuation is totally separate to however much of an asset we decide to sell.
Addicknt yes increase their offer
2Luke we are going to or have valued the 20 tenements we have up for partial sale or on a complete basis. Which means these are included. Cascabel may I remind you is now progressing towards DFS.
Only for change of control on assets of ‘book value greater than 50% (fifty) of the book value of the assets, rights and properties of the Company on a consolidated basis ‘ Only Cascabel would fall under that.
Q, this is simply a question of management reward and has nothing to do with defence mechanisms, diverse books, or any other such thing.
It seems to me as if our board were predicting the partial sale of Cascabel and that the percentage they had in mind to be sold was 30%. This would have triggered the bonus scheme and they were trying to persuade us that 30% represented a change of control. Of course, it's no such thing as our boys would carry on running the show, but with a lot more cash/shares in their back pockets.
I raised my objections to this sort of thing when the details first emerged and I most certainly won't be changing my vote.
Bubble, I assume you mean they increase the percentage offer ?
I've emailed my contact. Let's see what drops...
Addicknt it is harder to sell in part because of the diverse book and other defense mechanism's. If we want to sell off tenements, then we will need to sell a larger share or maybe 100%.
Therefore we will be attributing a higher value, and as such maybe will be used as part funding of Alpala and Porvenir. Hence this is about part funding and not about selling our flagship projects. I see this as a continuation of selling off of 20 tenements that Solgold have mentioned in the past.
Addicknt it doesn't imho they just increase their offer
Unusual few months DBW now this before an EGM,the stakeholders and our holdings will be used again soon I think if in fact the bid for cascabel is revised upwards let's see or j/v like Quady says
Q, how does it make a bid harder?
Bubble this has nothing to do with a bid. In fact quite the opposite. It's to ease the path to production, by making a bid harder.
Well done Fortissimo.
When will these guys finally get their corporate governance act together?
Although we didn't spot it, it's clear that the major interested parties spotted a naked attempt at self reward. When you look at it its blindingly obvious.
Caught with their trousers down trying to work a flanker, having to own up to it 6 days before the EGM and having an embarrassing amendment to approve at the meeting.
In fact I'm surprised this didn't need 14 days notice.
If the overall motion had been voted down, because of this 'trick', they would either have had to hold another EGM, defer it to the AGM (so why the haste anyway...because the new FY starts the day after the EGM...) or have two disgruntled new employees.
The good news is that this points to either a proposed JV for Cascabel, or Porvenir, or even a possible IPO of Porvenir/Green Rock.
The bad news is either for the new Directors if a 30% stake sale in anything had been proposed (someone cleverer than me can advise whether one of the smaller projects would qualify) or for us giving up 51% of one of our prospects rather than maintaining control.
All comments welcome.
No idea …… but what doesn’t kill you ……
DBW/Novice bounce ??
Well that did it ,now let's see if they decide whether to bid at a higher price or not for cascabel ,well done us shareholders who vented our disappointment along with the major stakeholders
At odds to many here I think this civil unrest may well work in our favour. The more of these events we can “come through” the stronger we become in the long term
Someone gaining 30% at PFS stage means we get bought out cheaply. So 50% is more desirable, as it is unlikely our partners will sell out their holdings for less than they are worth.
Fortissimo, not quite the same thing.
Fortissimo that makes no sense. We are at the PFS stage, so original figure of 30% is the bottom end. This adds to our defence of the company, and this clause will go or be replaced as we progress towards production.
If someone like BHP acquired a 29.5% stake or rounded up to 30% stake, then they are forced to make a bid. So 30% level if often seen as a 'change of control'.
'word' should read 'board' on last post. Further to that post, if the incentive scheme is to attract new talent ahead of development then in theory it becomes a P45 security bonus. It limits the company's ability to explore JV's or another asset deals that fall under 50%.
In short... you get your awards only on an asset sale or deal that sees the board 'lose control' as no one will do a deal on a 50 : 50 basis. There's always someone that requires control and that's major number is 51%.
SM, agreed, it does make it look as if they are predicting such an event.
On the broader point; when has 30% ever represented "change of control"? It was a try-on and frankly, a rather shabby one.
Thank heavens we have some major shareholders who've got the power to exercise this sort of veto.
Weird one as it kind of incentvises management to self capitulate to gain their awards as if they vest on 51% going to another party then it's 'loss of control' for them. I can see why SOLG thought 30% was better suited to this point but also see the dangers that they could farm out or JV and retain 70% interest control yet still bank the awards.
So to be blunt... I suspect it's BHP and NCM involved again and they want the word to be incentivised to hand over the keys! I guess we all do really! But at the right price.